Florida company to buy Nypro for $665M

A Florida-based manufacturer said it will buy Clinton plastics producer Nypro Inc. for $665 million. Jabil Circuit Inc. of St. Petersburg, Fla., said today in a news release the deal will extend its manufacturing services into the health care and consumer packaging markets.

A Florida-based manufacturer said it will buy Clinton plastics producer Nypro Inc. for $665 million.

Jabil Circuit Inc. of St. Petersburg, Fla., said today in a news release the deal will extend its manufacturing services into the health care and consumer packaging markets.

“We think this is an important strategic step in Jabil's development of engineering and capability intensive businesses,” Jabil Chief Executive Timothy L. Main said in a statement.

Nypro employs about 12,000 workers in 10 countries, including 850 workers in Clinton. The company generates more than $1 billion a year in revenue, Jabil reported.

It is almost entirely owned by employees, with about 80 percent of shares owned by an Employee Stock Ownership Plan that funds retirement benefits for about 1,900 employees.

That ownership structure limited Nypro's ability to finance long-term growth in an industry that is consolidating around bigger players, so company officials began evaluating options, according to Nypro President and Chief Executive Ted Lapres.

“It was a difficult decision for us and one we didn't take lightly and considered carefully,” Mr. Lapres said. “It became clear to us over the last several years that the industry is consolidating and size matters.”

Jabil is a contract manufacturer with considerable operations in electronics manufacturing. It reported $17.2 billion in revenue and $394.7 million in net income during the fiscal year ended Aug. 31, 2012. It employs about 141,000 people worldwide.

Mr. Lapres expects to remain with Jabil and said the company has a record of retaining 90 percent of the workers in the businesses it acquires. Jabil also knows the value of the Clinton facility, located in an old mill, he said.

“The old mill is a special place, and there is a commitment to keeping it,” Mr. Lapres said.

Nypro was founded in 1955.

Jabil's deal must still be approved by Nypro shareholders, including the Employee Stock Ownership Plan. Jabil said it expects to close the transaction during its fiscal third quarter, which ends May 31. Jabil expects the transaction to be neutral to slightly accretive to its core earnings per share in fiscal 2013 and add to earnings per share in fiscal 2014.

Jabil stock was trading up 6 cents at $19.42 a share at 1:35 p.m. today on the New York Stock Exchange.

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